Newfoundland v Exxonmobil: Court Dismisses Set-Aside Application Calling Parties "Well-Advised, Sophisticated"

On August 30, 2017 the Newfoundland and Labrador Supreme Court Trial Division released its decision in Newfoundland and Labrador v ExxonMobil Canada Properties et al, dismissing the Province's application to set aside an arbitral award.¹

The arbitral award, delivered in December of 2015 by a panel of three arbitrators (the "Award"), confirmed the deductibility for royalty calculation purposes of certain operating insurance costs individually acquired by certain oil companies with an interest in the Hibernia Project.²

The Court dismissed the Province's set-aside application and affirmed the Award on the basis that: (1) the parties had deliberately contracted out of the set-aside provisions in the provinces' Arbitration Act;³ and (2) the parties' agreement already established a clear procedure for reviewing the arbitral award. In this decision, Stack J. writes at length about party autonomy as it relates to contracting out, primarily finding that "sophisticated